Lithia Motors LAD
United StatesConsumer Cyclical · Auto & Truck DealershipsUSD
433.53 USD (+50.9%)
15 analysts
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Lithia Motors is one of the largest automotive dealership groups in the United States, selling new and used vehicles and offering financing, maintenance, and repair services.
Key points
from its scores- ✓Attractive valuation8.4
- ✓Good share-price trend8.0
- ✕Fragile balance sheet1.8
- ✕Little or no dividend3.4
- ✕Little competitive advantage3.6
AI analysis
bottom line, main risk, context and newsWait for the balance sheet to deleverage or for the Fed to confirm a rate-cutting cycle before taking a position, despite the attractive multiple.
Lithia Motors presents a very attractive valuation (P/E 9.52, forward P/E 6.80) and 16.9% earnings growth, but its extremely high leverage (Net Debt/EBITDA of 8.55) and low operating margin (4.61%) make it highly vulnerable to a rising interest rate environment, justifying its low financial health score (2.37).
The main risk is its extremely high financial leverage (Net Debt/EBITDA of 8.55), which in a rising interest rate environment could strangle its cash flow and limit its ability to operate and grow.
Context and risks
The auto dealership business is highly sensitive to the economic cycle and consumer credit. The strong leverage (Net Debt/EBITDA of 8.55) amplifies the risk of tighter financial conditions, already reflected in rising US interest rates, which could pressure vehicle demand and the cost of its debt.
Is Lithia Motors stock cheap or expensive?
at the analysis dateOn P/E and EV / EBITDA, it trades 21% below the Consumer Cyclical median on average.
| Multiple | Company | Sector | Difference |
|---|---|---|---|
| P/E | 9.5 | 17.8 | −47% |
| EV / EBITDA | 11.9 | 11.2 | +6% |
| Price / book | 1.0 | 2.9 | −66% |
| Price / sales | 0.2 | 1.3 | −87% |
Sector: median of the 228 Consumer Cyclical companies analysed. In bold, the multiples used for the comparison.
Valuation score: 8.4 out of 10 (median for Consumer Cyclical: 6.6).
Average analyst target: 433.53 USD, +50.9% versus the price.
A discount may reflect more risk or slower growth than its sector: Financial health 1.8 (sector 5.7), Growth 6.0 (sector 5.9).
Classic formulas with standard assumptions (10.0% growth, 8-9% discount rate). Indicative only: they change a lot with the assumptions and are not a recommendation.
Work out its fair value yourself →How much would you have made investing every month? →
Comparing it with its sector does not say whether it is a good buy: this is not investment advice.
Score by category
0 to 10 · hover overtap each one to see what it measuresKey metrics
at the analysis date · compared with the Consumer Cyclical medianValuation
- P/E
- 9.5
- Forward P/E
- 6.8
- EV / EBITDA
- 11.9
- Price / book
- 1.0
- Price / sales
- 0.2
- PEG
- 0.54
- Market cap
- 6.3B USD
- Enterprise value
- 22.8B USD
Profitability
- ROE
- 10.7%
- ROA
- 3.9%
- ROIC (approx.)
- 7.6%
- Gross margin
- 15.4%
- Operating margin
- 4.6%
- Net margin
- 1.9%
- Free cash flow
- 547.6M USD
- FCF yield
- 8.7%
- Cash conversion
- 28%
Solvency
- Total debt
- 16.6B USD
- Net debt
- 16.4B USD
- Cash
- 119.1M USD
- EBITDA
- 1.9B USD
- Net debt / EBITDA
- 8.55
- Debt / equity
- 257.70
- Current ratio
- 1.00
- Quick ratio
- 0.15
Growth
- Revenue growth
- +2.2%
- Earnings growth
- +16.9%
- EPS (TTM)
- 30.19 USD
- EPS (forward)
- 42.25 USD
Dividend
- Dividend yield
- 1.0%
- Payout
- 7.3%
Risk and market
- Beta
- 1.26
- Analyst consensus
- Buy (15)
- Target price
- 433.53 USD
- 52-week range
- 239.78 – 439.49
Recent news
All LAD news →Compare it with its sector
All 228 in Consumer Cyclical →Frequently asked questions about Lithia Motors
Is Lithia Motors stock cheap or expensive?
On P/E and EV / EBITDA, it trades 21% below the Consumer Cyclical median on average. Valuation score: 8.4 out of 10 (median for Consumer Cyclical: 6.6). Average analyst target: 433.53 USD, +50.9% versus the price. This is not investment advice.
What score does Lithia Motors get on MeridIAn Screener?
It scores 5.1 out of 10, rank 1,653 of 2,130 (better than 21% of the companies analysed). Its strongest category is Valuation (8.4) and its weakest, Financial health (1.8). Analysis of 08/10/2026.
What is Lithia Motors's P/E ratio?
Its P/E is 9.5: the share price equals 9.5 times earnings per share over the last 12 months. The Consumer Cyclical median is 17.8. Based on the earnings analysts expect, the forward P/E is 6.8.
How much is Lithia Motors worth on the stock market?
Its market capitalisation is 6.3B USD and its enterprise value, debt included, is 22.8B USD.
How much debt does Lithia Motors have?
Its net debt (debt minus cash) is 16.4B USD. That is 8.55 times its EBITDA; the Consumer Cyclical median is 1.91.
Does Lithia Motors pay a dividend?
Yes: its dividend yield is 0.97% and it pays out 7% of its earnings.
How has Lithia Motors stock performed over the last year?
It has fallen 2.9% over the last year, excluding dividends. Over the last 52 weeks it has traded between 239.78 and 439.49 USD. Past performance does not guarantee future results.
What do analysts think of Lithia Motors?
15 analysts cover it; their average recommendation is “Buy” and their average target is 433.53 USD (+50.9% versus the price). It is an estimate, not market data.